ACE plant

Mike and Frank,

Attached are the quotes for options based on your previous email. Please
look over the time periods, volumes and strikes. These quotes are indicitive
based on todays curves. Let me know if we need to firm up these numbers
tomorrow. I do have some questions/concerns relating to this deal before
this can be done however, they are:

1) Should the volume be a baseload volume of 10,000/day?
2) How are you buying your coal for the plant (i.e. fixed, index...)?
3) What is the correlation of the SRAC and the Socal Border price
(especially during this time of high volatility)?
4) Has there been a calculation of the change in Socal Border vs. the
change in the SRAC to calculate the proper volume to hedge (basically a
delta calculation)?

Please let me know if you have any questions or concerns. My phone number is
(713) 853-6247. Thanks.

John